Governments in the US and UK are facing important energy decisions, and it’s not all going to plan.
On 31st December the US federal wind credit expires. If it’s not renewed, suppliers will lose the tax break that makes wind power competitive with other sources. Low demand for wind energy has already forced large layoffs, and many believe that the industry will not be able to support itself without the credit.
Unsurprisingly, renewal of the tax break (which costs almost $1 billion a year) has become a divisive issue in the presidential campaign. Obama continues to express support, but Romney argues that Big Wind has had long enough to wean itself from the subsidy. Though the credit previously enjoyed bipartisan support, Romney’s declaration has convinced other Republicans that it’s time for wind to stand on its own.
In the UK it is looking like government is going to eliminate the requirement for home extensions to have improved energy efficiency. This could be potentially disastrous for the Green Deal, because this requirement was established to generate initial demand for the Green Deal.
In both situations, lack of demand threatens success.
Yet whose role is it to stimulate demand?
Should it be government policy and subsidies, business marketing, or informed consumption? I think it’s likely to require participation from all three. What do you think?